The U.S. government is set to borrow nearly $1 trillion this year, an 84 percent jump from last year

[TomCADem]

Source: MSN/Washington Post

It was another crazy news week, so it's understandable if you missed a small but important announcement from the Treasury Department: The federal government is on track to borrow nearly $1 trillion this fiscal year — Trump's first full year in charge of the budget.

That's almost double what the government borrowed in fiscal year 2017.

Here are the exact figures: The U.S. Treasury expects to borrow $955 billion this fiscal year, according to a documents released Wednesday. It's the highest amount of borrowing in six years, and a big jump from the $519 billion the federal government borrowed last year.

Treasury mainly attributed the increase to the “fiscal outlook.” The Congressional Budget Office was more blunt. In a report this week, the CBO said tax receipts are going to be lower because of the new tax law.

Read more: https://www.msn.com/en-us/news/politics/the-us-government-is-set-to-borrow-nearly-dollar1-trillion-this-year-an-84-percent-jump-from-last-year/ar-BBIDDl0

---

Of course, Mnuchin tried to BS rather than acknowledge that Trump's tax cut to the rich resulted in the explosion in the deficit.

[marble falls]

1. Maybe all the GOP needs to do is cut taxes further, it'll trickle down.

<insert sarcasm emoji here>

[SunSeeker]

2. THAT is why the stock market dropped 666 points yesterday.

Investors know interest rates are about to spike up, driven by all that borrowing.

[quartz007]

10. Wrong!

Stock market should have dropped 666 points the day that $1.5 Trillion tax cut was passed. Because that guaranteed the ugly huge borrowing Treasury would need.

So obviously the drop yesterday was NOT related to guaranteed ugly huge budget deficits.

So what other BIG news came out yesterday?
Yap, it was the memo release.

[lapfog_1]

17. The market started dropping early in the week.

And that drop was directly related to the worldwide churn in the bond market.

That churn was caused by increased yeilds offered by the US to finance debt.

Debt is directly related to decreased revenue due to the tax cut.

This was all outlined by Ali Velshi on Tuesday on his noon (PST) show.

[quartz007]

18. The FED controls interest rates, not bond prices

We borrowed $10 Trillion from 2009-2016 but that did not phase the markets. Because FED kept the interest rates at record low levels. Now with Janet gone from FED, the bond market is worried the next chair may not be so accommodating.

But all this is NOT new news. Why the huge 666 points on Friday? I have to conclude it was the memo release.

[lapfog_1]

20. Actually the bond markets control the yields on bonds.

Two things happened to roil the bond markets.

1. The tax cut has caused the treasury to float more bonds to cover expenses

and

2. China has moved from a buyer of US bonds to a more neutral..

So the Treasury had to increase the yield to move the paper.
That caused the entire bond market ( to include corporate bonds ) to match the rate.

The result is that corporate profit futures are now less promising as those companies have to pay the increase rate on their bonds they sell.

The stock market is ( usually ) about future performance. The increased profits due to the lower tax rate in the US was already priced into the market. Now the reality of increased deficit spending by the government is being reflected in the stock market.

Again, this is me saying this, this is exactly as Ali Velshi spelled it out much earlier this week. I think he is the best business analyst on TeeVee right now since Mark Haines (sp?) died.

[quartz007]

21. LOL market analysts are no better

at predicting future than horse racing touts.

If Velshi had predicted the 666 point drop on thursday,
he would have some credibility.

I do well ignoring all business analyst forecasts.
Have you noted they always come out with an explanation
after the event?

[SunSeeker]

27. Velshi was not predicting the future, he was just explaining what is happening now.

No one can predict the future. But you can certainly figure out what is happening now and why the stock market is plunging now. Velshi does a good job of that, and I find him to be quite progressive in his comments.

[quartz007]

29. Why do they ALWAYS do postmortems?

If the analyst are so smart, how about PREDICTING sudden moves in the markets so joe-6-packs like me can benefit? If the explanations are so valid post-event, why were they not issued the day before?

[SunSeeker]

30. Um, so people know why things are happening?

He was just explaining why, not trying to give stock tips to benefit you.

If you are a Joe six pack, I can't imagine why you would want stock market tips. Most Joe six packs don't have stock portfolios. They rarely have more that $1,000 in savings, let alone stocks.

According to a 2017 GOBankingRates survey, more than half of Americans (57 percent) have less than $1,000 in their savings accounts.

[quartz007]

42. 40% of US workers have 401-K's

There are plenty of Joe-6-Packs among them, since 40% is not even close to top 10% who own 60%+ traded stocks.

My 403-B is the main reason I can afford retirement.

[SunSeeker]

46. If you have a 403-B and can afford retirement, you are among the lucky.

As much as you like to call yourself a "lowly" "Joe six pack," having that kind of retirement savings and stocks puts you in the top 40%---at least. While virtually all (94%) of the very rich reported have significant stock holdings—as defined as $10,000 or more in shares—only 27% of the middle class do. http://time.com/money/5054009/stock-ownership-10-percent-richest/

[quartz007]

47. Huh? I am just a

low ranking retired government worker. We get 403-b's instead of 401-k's.

[SunSeeker]

48. A "low ranking government worker" is in a LOT better shape than most in the middle class.

Let alone the working poor, i.e. "lowly Joe six pack."

That is why many Americans resent government workers, and the right is able to play upon that resentment. I know you may not think you have much, but you do. Americans' resentment of government workers will continue until all Americans have access to the same retirement and benefits you have...or until government workers' benefits are reduced to the level of the rest of the middle class (i.e., zero). Sadly, we are moving toward the latter.

[quartz007]

49. On that we agree!

Benefits is what carried me, not the pay levels.
Peace...

[SunSeeker]

24. Well, folks on Wall Street says it was fear of interest rate hikes.

But the White House shit show is definitely not helping:

"It's all about rates. Asset prices and the economy have become addicted to low rates," said Peter Boockvar, chief investment officer at the Bleakley Financial Group. "Sentiment got euphoric. There is more froth that needs to be taken off."

The sell-off knocked the Dow well below 26,000. Both the Dow and S&P 500 suffered their biggest weekly drops since early 2016 -- roughly 4% each.

Political turmoil is adding to the uncertainty. Market analysts pointed to the clash between the Trump administration and the FBI as another concern.

"There looks like a breakdown of the institutions in our country," said Ian Winer, head of equities at Wedbush Securities. "No matter what side you're on, that's not good."

http://money.cnn.com/2018/02/02/investing/stock-market-today-dow/index.html

[quartz007]

28. Correct!

The interest rate picture is not a surprise. Everyone and their uncle knows the FED has kept interest rates artificially low record levels.

Just look at your medical bills, utility bills, grocery prices, college tuitions, etc. and can anyone honestly say inflation rate is lower than 2%? Interest rates have historically run congruent with inflation rates. But not since 2009.

My whole point is the 666 point drop in DJI on Friday was predicted by not a single business analyst. We all know about federal budget deficits. $11 Trillion cumulative deficits since 2009. But interest rates remained sanguine. So why the sudden drop on Friday?

Like you said, the shit flying from WH & Nunes.

[SunSeeker]

31. Lots of folks have been predicting a stock market correction.

https://www.cnbc.com/2017/11/27/chance-of-us-stock-market-correction-now-at-70-percent-vanguard.html

https://www.cnbc.com/2017/12/02/strategist-jim-paulsen-says-prepare-for-a-stock-market-correction-in-2018.html

http://fortune.com/2017/12/28/stock-market-predictions-future-2018-crash/

[quartz007]

43. Haha..but no dates specified!

Even lowly me can safely predict there will be a correction of 20-30% soon. Because the markets have gone up a whopping 44% since election 2016. But please do not ask me the exact month. Because I do not know and am honest to admit it. But do any of the "experts" in articles who linked admit they have no clue of the time factor?

[SunSeeker]

44. Like I said, no one can predict the future. Certainly not with any precision.

I guess you find that funny, but until we become clairvoyant, that is life.

[quartz007]

45. Not funny, I find them totally USELESS

Anyone with an ounce of brain knows how to explain postmortem. Which is why ignore all financial experts, and use my own judgments. And doing just fine.

[LastLiberal in PalmSprings]

3. The GOP screams the Dems are "tax and spend," but it's the Repugs that are "borrow and spend"

It's the difference between "pay-as-you-go" and "I'll gladly pay you Tuesday for a hamburger today."

[House of Roberts]

14. Borrow and blow.

After the money is gone there's nothing left to show for it.

[kimbutgar]

4. Why arent the tea baggers screaming about this?

Oh I know Fox didn’t tell them and there’s no a black man in the White House.

[quartz007]

11. Because they like the raise

in paychecks this month due to reduced withholding. For example, my kid received $27 weekly raise. Teabaggers don't care about deficit if the money goes to THEM. They get mad when the deficit money is spent on the unemployed.

[mahannah]

5. And dollars "borrowed" from Social Security"?

[quartz007]

12. Social Security has no excess money to lend

Social security is NOT running a surplus.
You can not borrow from someone who has no money to lend.

The deficit will be covered by:

1. Issue of more Treasury bonds

2. Printing paper dollars.

[mahannah]

13. check history of ss dollars

[quartz007]

15. Baby boomers are draining SS

They are retiring at high rates. Ratio of those collecting social security / those paying into social security is increasing ever year in the Western world. That situation is even more dire in Japan and Western Europe.

[not fooled]

22. Um

that's why raygun admin and Dems led by Tip O'Neill worked together to increase SS taxes, to provide a bulge in funding to pay for the Baby Boomers. That's back before pukes became big-time destroyers of SS.

Peterson and the rest of the puke SS destroyers peddle the notion that Baby Boomers are "draining SS." They are actually taking out the money that was paid in in excess specifically to cover them.

[lunasun]

26. +++ and paid by the deductions from them but that's what we will hear soon - "draining"

Maybe even hear stealing it all at once .

[BlueIdaho]

6. Maybe Trump can get the money

From his Russian buddies...

[steve2470]

7. and the ignorant Republican/right wing rank and file will continue to ignorantly claim that...

the Republicans are the party of fiscal discipline, small government, blah blah blah. Hell, some pundits will continue to do it too, some with ignorance and some with no ignorance at all.

[pangaia]

8. The entire intent of the 'tax cuts' and thos borrowing is to bankrupt the government

so the fascist pigs can take SS and medicare away.

trust me on that one.

[Corgigal]

16. That's it.

It's coming, and when grandma and grandpa got to moved back into the white middle class kids house. Listen for the what? Wait, what?

They have no clue, they can't see.

[GETPLANING]

9. Borrow and spend

It's the biggest scam of all time.
Lower taxes on the rich.
The rich take the money they used to pay taxes with and buy tax free municipal bonds.
The bonds pay for schools, Pensions, infrastructure, etc.
The bonds are tax free.
The bonds are paid by government with tax money collected from the working class (W-2 wages)

Instead of the rich paying their share of the costs of running a civilization...
We are now paying THEM.

[ffr]

25. Spend and spend conservatives. But look at the the stock market. On second thought.

Don't.

What is it going to take to break the some conservative GOP congresscritters loose so we can restore some sanity. You don't run deficits like these in a good economy.

[yuiyoshida]

19. Someone has to pay for Mar A Largo....golf fees...

guess its the American people.

[C Moon]

23. They're going to blame it on social programs.

[Hoyt]

32. Unfortunately, its a lot more than the tax cut creating that. The budget junk will get

uglier in next year or so. Of course, military and similar budget allocations are off limits in helping mitigate this problem. Things people need are what Congress will focus on.

[DFW]

33. Trump is a one trick pony: make a deal, default on paying it, then say whatcha gonna do about it?

That's why he and Ryan will crow now about someone getting $1.50 more in their paycheck, but be long gone when those "lucky" people have to sell pencils on street corners when they retire.

Since the people destined to be pencil sellers don't want to hear about that just now, they will continue to support Trump because, well, every three weeks now, they can go to Starbucks and splurge on a small caffè-con-carne or whatever it is they serve there.

[dalton99a]

40. +1

[duforsure]

34. The economy will collapse

Taking 6-8 trillion out of it, taking away health care to millions, driving the deficit up higher, increasing interest rates, and starting more wars. It'll backfire on them again, and robbing seniors Social Security , which is what they're setting this up to do will only make it worse. Their give the rich more plan has failed many times before, as this will too. He also gave more tax incentives for businesses to move offshore, the opposite of his claims. This will hurt when it catches up.

[bucolic_frolic]

35. Insolvency lies ahead

Holding obligations of the Federal Government is not risky, but ... one never knows what can happen.

Once the blood loss becomes a hemorrhage, people will want their money, which exacerbates the bleeding.

There are financial tourniquets - capital controls such as limiting redemptions, making export of capital illegal or restricted - but that undermines confidence while feeding the desire to redeem. Or how about negative interest rates?

Be mindful of possibilities, and act for self-protection and preservation of capital.

[workinclasszero]

36. If democrats had done this the right wing would be going even more crazy than usual

WTF are all the republican deficit hawks now?

F**king hypocrites!

[enid602]

37. T-bills

The title of this OP is misleading. Our 21 or 22 trillion dollar debt is made up of Treasury Bonds. Although T-Bills range in maturity dates from 1 week to 30 years, the average T-Bill matures in 60 days. That means our government is essentially having to borrow 21 or 22 trillion on the market every 2 months.

[kimbutgar]

38. Good luck finding buyers of treaduries

Twitler has pissed of China who is a large buyer of our debt. Yields are going up and bind prices are going dine biggly this year forcing the fed to raise interest rates. Twitlers policies will bring us back to Reagan era 12-13% yields.

The whole world knows the USA will become a dumpster fire under Twitler. They will move on away from us and leave the country marginalized.

[dalton99a]

39. Everything Donald Trump touches turns to shit.

[Dyedinthewoolliberal]

41. Brought to us by

the party of fiscal responsibility and small government..............

[riversedge]

50. k for visibility